EnerSys

17. Stock-Based Compensation

As of March 31, 2024, the Company maintains the 2023 Equity Incentive Plan (“2023 EIP”). The 2023 EIP reserved 3,614,500 shares of common stock for the grant of various classes of nonqualified stock options, restricted stock units, market condition-based on total shareholder return (“TSR”) and performance condition-based share units (“PSU”) and other forms of equity-based compensation. Shares subject to any awards that expire without being exercised or that are forfeited or settled in cash shall again be available for future grants of awards under the 2023 EIP. Shares subject to stock option or stock appreciation right awards, that have been retained by the Company in payment or satisfaction of the exercise price and any applicable tax withholding obligation of such awards, shall not be available for future grant under the 2023 EIP.

As of March 31, 2024,5,449,381 shares are available for future grants. The Company’s equity incentive plans are intended to provide an incentive to employees and non-employee directors of the Company to remain in the service of the Company and to increase their interest in the success of the Company in order to promote the long-term interests of the Company. The plans seek to promote the highest level of performance by providing an economic interest in the long-term performance of the Company. The Company settles employee share-based compensation awards with newly issued shares.

Stock Options

During fiscal 2024, the Company granted to management and other key employees 200,314 non-qualified options that vest ratably over 3 years from the date of grant. Options expire 10 years from the date of grant.

The Company recognized stock-based compensation expense relating to stock options of $7,022, with a related tax benefit of $730 for fiscal 2024, $6,232 with a related tax benefit of $848 for fiscal 2023 and $6,235 with a related tax benefit of $738 for fiscal 2022.

For purposes of determining the fair value of stock options granted, the Company used a Black-Scholes Model with the following assumptions:

The following table summarizes the Company’s stock option activity in the years indicated:

The following table summarizes information regarding stock options outstanding as of March 31, 2024:

Restricted Stock Units, Market and Performance-condition based Awards

Non-Employee Directors

In fiscal 2024, the Company granted to non-employee directors 21,147 deferred restricted stock units (“DSU”) at the fair value of $76.83 per unit at the date of grant. In fiscal 2023, such grants amounted to 39,792 DSU's at the fair value of $42.95 per unit at the date of grant and in fiscal 2022, such grants amounted to 24,055 DSU's units at the fair value of $60.29 unit at the date of grant. The awards vest immediately upon the date of grant and are settled in shares of common stock six months after termination of service as a director.

The Company also granted to non-employee directors, during fiscal 2024, fiscal 2023 and fiscal 2022,8,386,1,635, and 781 restricted stock units, respectively, at fair values of $94.34, $66.90 and $88.27, respectively, under the deferred compensation plan for non-employee directors.

Employees

In fiscal 2024, the Company granted to management and other key employees 269,751 restricted stock units that vest ratably over four years from the date of grant, at the fair value of $94.31 per restricted stock unit.

In fiscal 2023, the Company granted to management and other key employees 345,449 restricted stock units that vest ratably over four years from the date of grant at the fair value of $70.88 per restricted stock unit.

In fiscal 2022, the Company granted to management and other key employees 229,600 restricted stock units that vest ratably over four years from the date of grant at a fair value of $91.81 per restricted stock unit.

A summary of the changes in restricted stock units, including DSU's, and TSRs awarded to employees and directors that were outstanding under the Company’s equity compensation plans during fiscal 2024 is presented below:

The Company recognized stock-based compensation expense relating to restricted stock units, TSRs of $23,585, with a related tax benefit of $4,557 for fiscal 2024, $20,139, with a related tax benefit of $3,746 for fiscal 2023 and $18,054, with a related tax benefit of $3,072 for fiscal 2022.

All Award Plans

As of March 31, 2024, unrecognized compensation expense associated with the non-vested equity awards outstanding was $54,014 and is expected to be recognized over a weighted-average period of 22 months.